West Texas Intermediate (WTI) or the US Crude gained as much as 9.4% on Monday and is up another 1% on Tuesday to trade near the $80 a barrel mark. Brent Crude rallied by a similar quantum overnight and is now near the mark of $85 a barrel.
US President Donald Trump, in a post on Truth Social, demanded that the US must be reimbursed a 20% fee on cargoes, or over $30 million on full supertankers carrying oil, while the US Central Command launched a third straight night of strikes on Iran and reimposed a blockade on ships entering or leaving Iranian Ports starting 4 PM Eastern Time on Tuesday.
Trump said the US will be reimbursed by the countries it’s helping to project the strait, citing Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Kuwait.
Crude oil prices are rebounding after having collapsed over 30% during the April-June period as the US-Iran ceasefire took effect and both countries also signed an MoU to bring about an end to the four-month long war. The fragile ceasefire, did not last long.
Reports also suggest that Iran managed to ship out at least 57 million barrels of crude, during the gap between the first US Naval blockade and this one.
“They were just shipping oil out at unbelievable rates,” said Jay Hatfield, chief executive officer at Infrastructure Capital Management. “We think we’ll hang around this $80 level, unless there’s some movement one way or another on the strait. But I don’t think we’ll go to, like, $90 or $100. And if the strait reopens, we’ll go to $60 in a hurry.”
Iran’s army has targeted US assets in Kuwait with drones and also hit a hostile vessel with a cruise missile, as per its semi-official Fars news agency, who quoted an Army statement, while the United Arab Emirates said that two of its tankers were attacked in the Southern pathway of the Strait.
The UAE had managed to increase production of oil to 3.8 million barrels per day in June, from 1.71 million barrels in May. It managed to move its barrels by using shuttle tankers sailing dark or with their transponders off.
Iran has reiterated that they will remain the only guardians of the strait of Hormuz, as per its Foreign Minister Abbas Araghchi, who wrote on “X”, mocking Trump’s 20% fee demand, calling it “too much” and adding that “we (Iran) will be fair.”
(With Inputs From Agencies)
